@marillo Globe-News: News: Probe may be conflict 4/10/98

Posted: Friday, April 10, 1998

Web posted Friday, April 10, 1998 1:54 p.m. CT

Probe may be conflict

By THE ASSOCIATED PRESS

With RICKY GEORGE

Globe-News Staff Writer

Despite a possible conflict of interest, the Justice Department is giving Whitewater prosecutor Kenneth Starr authority to investigate whether a conservative group provided payments to his key witness.

Acknowledging that Starr's connections to the group's financial backers could give the appearance of a conflict, Deputy Attorney General Eric Holder nonetheless said the matter is Starr's to investigate.

"Your jurisdiction specifically encompasses obstruction and witness tampering matters arising out of your investigation," Holder said in a letter to Starr on Thursday.

Holder left open the possibility that Starr could refer the matter back to the Justice Department "should you believe that this matter would be better investigated by the department."

The decision allows Starr to look into allegations that top Whitewater witness David Hale received payments and other assistance from conservative activists working for a foundation that publishes the American Spectator magazine. An Arkansas woman has alleged that Hale received the assistance when he was cooperating with Starr's investigation and that Hale gave magazine officials information about the probe.

American Spectator publisher Terry Eastland said no money was ever given to Hale. Hale's lawyer said he is not aware of any payments.

Starr has several connections to the American Spectator foundation. Eastland is a personal friend of Starr's. Also, Starr's friend and former law partner, Washington lawyer Theodore Olson, is a director on the foundation's board.

The foundation has received funding from a group controlled by billionaire publisher Richard Mellon Scaife that gave $1 million to Pepperdine University, where Starr plans to teach after the investigation.

The Justice Department's decision comes as time runs out on a Little Rock grand jury investigating Whitewater. The panel goes out of business May 7.

Starr will have to decide whether to end the probe then or ask a federal judge to empanel a new grand jury. He said last month that he hoped he would not need to ask for a new grand jury in Little Rock but that he had not yet decided.

Allegations that Hale was assisted by conservative activists surfaced in March. Caryn Mann, a Bentonville, Ark., funeral home employee, said that her former live-in boyfriend received money from magazine officials and that her son saw the boyfriend, Parker Dozhier, give cash to Hale while Hale was cooperating with Starr's investigation.

She said Hale and Dozhier provided information about the Whitewater probe to officials at the magazine and that Hale was often accompanied by FBI agents when he visited her former boyfriend.

Dozhier acknowledged to The Associated Press that he received $35,000 to be the magazine's "eyes and ears" in Arkansas and that Hale occasionally stayed rent-free in a secluded fishing cabin he owns. But he denied giving money to Hale.

Whitewater prosecutors working with Hale said they were unaware of Dozhier's ties to the conservative activists. Starr's spokeswoman Debbie Gershman could not be reached for comment Thursday.

In reaction today, Amarillo resident Chad Bashor said Starr shouldn't be allowed to investigate Hale but that the prosecutor had not gone beyond the boundaries of his investigation yet.

"If there's a potential conflict of interest they need to get somebody else in there," Bashor said.

Richard Jackson, retired associate professor of political science at West Texas A&M University, said he had only heard a little about the story but said it would be up to the attorney general to decide whether to let him pursue the investigation.

"It's more of a political decision than a legal decision," Jackson said.